ANGLO SWISS HOLDINGS LTD V PACKMAN LUCAS LTD

The proceedings brought by the clients against the consultant in which they claimed the sums directed by the adjudicator to be paid by them to the consultant should be stayed until the clients paid those sums

9 December, 2009

Technology and Construction Court
Akenhead J
9 December 2009

The consultant brought adjudications against the client companies before the same adjudicator for unpaid fees in relation to projects on three properties they owned. The adjudicator decided that the clients should pay the consultant specified sums in relation to each of the projects on the basis that it was not open to them to run the arguments that no sum was due or that there had been overpayments in the absence of having given notices of intention to withhold payment. These decisions were not honoured by the clients. The consultant began court enforcement proceedings and obtained default judgments and final charging orders against the properties. The clients began proceedings against the consultant in which they claimed the sums directed by the adjudicator to be paid by them to the consultant and put forward detailed arguments and evidence to the effect that not only was nothing due but that there had been overpayments to the consultant. The consultant applied for the proceedings brought by the clients to be stayed pending compliance with the default judgments.

Akenhead J granted the consultant’s application. This was an appropriate case for the court to order a stay of the proceedings until the clients did what they were contractually required to do, namely pay now on the adjudication decisions and argue later then as was always agreed. There was unreasonable and oppressive behaviour and some elements of bad faith involved in the clients pursuing their claims without first honouring the adjudicator's decisions (in particular) and the judgments enforcing them. The clients were simply ignoring the contractual and statutory requirements that they should honour adjudicator's decisions until the final resolution of the underlying disputes, circumventing those requirements and trying to use their current claims to pressurise the consultant whilst not paying it. The clients showed bad faith by putting forward claims which they knew were significantly exaggerated on the knowledge which they themselves had or of which they had become aware since seeing the consultant’s evidence which they had chosen effectively not to challenge. There was no good reason why the clients or those behind them could not honour forthwith the decisions and judgments against them. The parties were not on the equal footing in which they should have been if the clients had honoured their contractual commitments.